We’re living through economically fragile times where effective management of personal finance is one of the few things that can add more predictability to our lives. This probably explains the fast rise of personal finance apps that do the heavy lifting of tracking your financial well-being.
By 2030, the market of personal finance management applications is projected to surpass $450.8 billion. The market potential is already tangible today: finance management applications are one of the most lucrative fintech niches, with a funding of over $3 billion in 2023.
But to get your share of the wallet in the niche, it’s not enough to dabble in personal finance app development. You have to know the ins and outs of it to make a successful personal finance management application with long-term success.
In this blog post, Orangesoft’s team is giving you the lowdown on personal finance app development — based on our experience of building 300+ web and mobile applications.
Types of personal finance apps that lead the pack in 2024
Personal finance applications can help users accomplish a variety of goals, from whipping their finances in shape and getting rid of unnecessary expenses to setting clear investment goals. Based on the services provided, financial apps can be grouped into different categories.
Budgeting apps
Budgeting applications are designed to give users a holistic picture of their household and personal budget, allowing for accurate monthly cash flow planning. Complemented with advanced features, these apps can also identify where cutbacks can be made.
Budgeting applications usually link up to banking and credit card accounts to pull in real-time transaction data. They can exist as stand-alone apps or as complimentary modules within banking apps. PocketGuard and Copilot are fine specimens of budgeting applications that come with a host of analytics features and integrations.
Expense tracking apps
Expense tracking applications and budgeting apps may hang together, but while the latter gives you a snapshot of your cash flow and financial well-being, expense trackers keep a close watch over your spending. These applications typically break down your expenses into different categories to help users understand where their money goes.
That’s exactly what Rocket Money and Monefy do. Thanks to built-in spending categorization, these popular expense tracking apps turn the grunt task of expense tracking into a breeze.
Investment apps
Investing apps offer a host of tools and features to help users manage their portfolios and buy or sell investments via mobile. Usually, such applications incorporate real-time market analysis tools and in-depth educational materials so that users can make informed investment decisions that suit their investment style. Most financial firms and brokerages now offer investment applications. Plum and Robinhood are one of the major market players in this category.
Credit score monitoring apps
In countries like Canada, the UK, and the USA, a high credit score acts as a guiding light that can introduce you to better borrowing terms and lower interest rates, among other opportunities. These apps help users stay on top of their credit scores and get updates on any swings. Some applications can also detect signs of fraud in credit reports.
Apps like Credit Karma and Credit Sesame provide users insights into their level of trustworthiness as borrowers, break down individual factors that make up their scores, and keep a pulse on credit reports.
Loan and debt management apps
As the name implies, loan and debt management apps help individuals manage their debts and loans by tracking and analyzing their payment status, interest rates, and payment schedules. Some applications also provide personalized strategies for tackling debt based on the user's income and debt profile. The Debt Payoff Planner and Tally apps are popular debt relief solutions in the category.
Tax preparation apps
Tax prep apps make preparing and filing tax returns easier for individuals. These apps allow taxpayers to input their income, deductions, and other relevant information necessary for completing their tax forms directly from their smartphones. In the US, users trust this process to applications like TurboTax and Cash App Taxes.
Savings apps
These apps make saving money less of a hassle, offering individuals a wealth of tools to effectively manage personal finances and set money aside for different purposes. Most personal finance applications, such as YNAB, include money-saving features as an add-on, while others, like MoneyBox, revolve around savings and act as digital piggy banks for users.
Bill payment apps
This type of finance application allows users to automate their payment schedule, make peer-to-peer payments, and pay all bills in one place with just the click of a button. Prominent examples of bill payment organizers include apps like TimelyBills and BillOut.
Split-the-bill apps can also be lumped into this category. These apps help groups of people easily divide expenses incurred together, such as meals at restaurants, shared bills for utilities, or group outings. Splitwise is a leader in the category of split-the-bill applications.
How to build a personal finance application? Six core steps
There’s a lot that goes into building a financial app. That’s why it’s important to progress iteratively, as building in small iterations will help you take the majority of the risk out of the development process, focus on high-value features, and roll with the punches.
Double down on project discovery
The discovery stage is what eases your product development team and you into the context. The half-hearted discovery stage is what causes confusion, budget overruns, and product flops later in the project. That’s why skipping or skimping on it is a bad idea if you want your product to succeed.
During the discovery stage, you clarify your product’s goals and limitations, scope out requirements, identify the functional capabilities of the application, and distill the must-have features that will make it into the application. At this stage, your product development team also runs market research, competitor analysis, and target audience research to inform your product development strategy with real-world data.
Here, you also gain a solid understanding of the legal requirements that apply to your budget planning application. Common compliance regulations include AML/KYC, CCPA, PCI DSS, IFRS, FINRA, GLBA, FCRA, SOC1 and SOC2, and others. In most cases, you’ll also have to get to grips with location-specific regulations.
While compliance with regulations is crucial, collecting excessive personal information can also expose finance apps to regulatory risks, such as violations of data protection laws like GDPR or CCPA. To reduce the complexity of compliance efforts and potential legal liabilities, we recommend limiting the amount of personal information collected by the app.
Related: Why is a discovery phase crucial for your project's success?
Plan the project
Thorough project planning can accelerate your time to market and prevent bloated budgets from creeping into the development. During the planning stage, your team decides on the milestones and KPIs for your project and develops a detailed roadmap with each deliverable laid out in an easy-to-grasp timeline format. The team also highlights possible project risks and creates a dedicated risk mitigation plan.
At this stage, your team can also get down to selecting a tech stack for your product based on its requirements and your priorities.
Designing product architecture and its UX/UI
Contrary to popular belief, design in product development is not only about crafting its exterior. Having a solid architecture design at the core of your product is also essential to lay out a reliable foundation for its great performance. With this goal in mind, your development team sketches out the high-level picture of the product’s major components, structures, and how they interact with each other.
Based on the architecture design, your team then prepares a prototype that demonstrates the app’s fundamental design and its functions.
In the meantime, your UX/UI team conducts user research to uncover the behavior, interactions, and preferences of potential users. Using these insights as a launching pad, they prepare functional wireframes and content layouts that will become the foundation for the application’s UX and UI.
Developing a minimum viable product
A minimum viable product, or MVP, is a stripped-down version of your product that includes only the essential, must-have features to address the main pain points of the target audience. The benefits of building an MVP are manifold: from the reduced cost of development and minimized risk to a better product-market fit and elevated user experience.
At Orangesoft, we break the MVP development process into small, manageable iterations (sprints) to ensure high product quality and incremental value to users. When building an MVP for a personal finance management solution, it’s crucial to focus on performance, scalability, and security.
Ensuring the security of the application through comprehensive testing
By testing the product early and running QA activities, you promote a higher quality of the final deliverables. An experienced product development partner should apply the security-by-design approach, put in place security safeguards, and apply DevSecOps practices to ensure the early testing of your product.
Also, financial planning apps should have a Fort Knox-like security that keeps your product in line with regulations and best data security practices. Data encryption, AI-based fraud detection, device identification, secure API, and other safety nets will put a perimeter defense around your app and make sure it won’t fall prey to cyber-attacks.
Launching MVP and measuring its performance
Once your MVP is brushed up and polished, it’s time to submit it to the app stores of choice. After the launch, your product development team measures and analyzes the performance of the MVP and collects user feedback to plan for improvements. MVP success metrics differ by the product and your business goals.
Building a roadmap for product evolution
With user feedback and analytics data on hand, your team elaborates a product development strategy and plans updates and product enhancements. Keep in mind that the release dates should be flexible yet defined to both avoid unnecessary pressure and keep the users engaged with your product.
Key features to include in a personal finance app
Smart, personalized, all-in experience — that’s the kind of benchmark your potential users have for a personal finance management app. That’s a tough bar to achieve unless you know the exact features that enable this experience. Below, we are breaking down the absolute essentials for your finance app that will put your startup on the users’ radar.
Authorization and personal account
Most applications require a user to create a personal account as a preliminary step. However, authorization in a personal finance management app needs additional security features. Two-factor authentication and other safeguards are necessary to add an extra layer of security.
Analytics and reports
By using analytics and reporting in finance management apps, you can empower every user to get the insights they need to make informed budgeting decisions and get a holistic image of their finances. Analytics and dashboards are also instrumental in making any type of financial data actionable and easy for the user to understand. AI-powered analytics tools can automate expense tracking, provide forecasts, and generate detailed financial activity reports.
Income and expense categorization
Depending on its type, a finance management application should also provide transaction categorization and facilitate the money management process for the end user. Add predefined categories like transportation, food, house rent, and more — paired with custom ones — to help users track spending patterns and allocate costs properly.
Integration with banks and payment systems
Seamless integration with broader financial ecosystems like banks and payment system providers is a standard requirement for personal finance tracking applications. This integration relieves users of manual data entry and enables your application to pull in real-time transactions. As an alternative, some applications may include OCR-based receipt scanning.
Strong security
In 2023, the financial industry suffered the most data breaches, which once again emphasized the importance of implementing robust security measures into finance applications and related experiences. That’s why your finance application should be designed with security in mind, employing multi-layer data encryption, authentication, and other safeguards.
And don’t forget about the red tape: your application must meet relevant data security standards such as GDPR and ISO 270001.
AI-powered financial assistance
To cut the mark, your budgeting app should also integrate a set of cutting-edge technologies, such as AI and machine learning, to provide users with standout features. In 2023, the number of customers who interacted with virtual assistants increased to 24% from 4% in 2019.
AI-powered assistance can take many forms in a finance tracking app. From personalized financial advice and predictive analytics to robo advisors, finance apps are betting big on artificial intelligence.
Income and expense tracking
Remember the all-in experience we mentioned earlier? To fill the bill, your app should be able to monitor the income across all channels and consolidate expenditures across bank accounts, mobile wallets, and credit and debit cards. Some applications also leverage this functionality to notify users about upcoming payments and due dates, which brings us to the next point.
To help users stay in control of their finances, budgeting applications should allow for setting spending limits and custom budget allocation. Integrating gamified elements for goal setting is also a nice touch.
Notifications and alerts
The timely, non-intrusive delivery of actionable alerts can act as a bridge between your app and the user, boosting engagement and exposing the user to important updates. Through notifications, users can keep track of payment due dates, changes in financial markets, or new opportunities.
Alerts also reinforce the security of your application by notifying the user about potential fraudulent activity, unusual account behavior, or unauthorized access attempts. Often, financial apps let users choose what notifications they receive and adjust the frequency and content of the alerts. Customization allows users to receive notifications tailored to their specific needs and interests, giving them more control over their app experience.
How much does it cost to build a custom personal finance app in 2024?
The total cost of building your finance management app hinges on several factors. The number and complexity of features, the need for third-party integration, and security requirements are among the core cost drivers that can significantly impact the overall budget.
Our experts have put up a pricing table below for building a native mobile personal finance app for iOS and Android. The estimates are based on the average hourly rate of $40/hour.
| Features | Development time, hours (Android+iOS+backend) | Approx. cost, $ |
|---|---|---|
| Authentication | 230 | 9,200 |
| Settings | 31 | 1,240 |
| Expense and income category settings | 122 | 4,880 |
| Statistics | 245 | 9,800 |
| Financial goals | 154 | 6,160 |
| Bank accounts | 134 | 5,360 |
| Transactions | 182 | 7,280 |
| Notifications | 68 | 2,720 |
| Total | 1,166 | 46,640 |
Keep in mind that our estimation is only for MVP development costs. By building an MVP first, you can cut development costs by validating the product early, focusing on essential features, minimizing unnecessary development, and reducing the risk of developing a product no one needs.
To strategize and develop a full-fledged product, you also need a team of business analysts, QA specialists, designers, and other specialists. These activities are priced separately and aren’t included in the estimation above.
How to monetize a personal finance app?
The revenue stream of your finance app depends on what kind of an app you’re building. So, the bottom line would be choosing a monetization strategy that aligns with your app's goals and revenue objectives. Typically, finance applications employ a combination of the following monetization models:
- Freemium. Within this monetization method, your application offers a basic set of personal features for free and charges a fee for extra features.
- Charging fees. Some finance applications charge extra for certain services, such as credit and identity monitoring or investment portfolio management.
- In-app ads. In combination with a freemium model, this revenue-generating method allows you to provide an app for free and bring in money by placing targeted ads in your app.
- Subscriptions. This recurring revenue model allows you to generate revenue by charging your customers a monthly or yearly fee in exchange for the app’s services.
- Data and insights monetization. With this model, your goal is to gather a sizable user base and accumulate information on their spending patterns and behavior — and then sell this data to data collectors.
- Paid app. To access an application, users have to pay an upfront fee to download and install it from the app store.
- Referral fees. As an alternative to in app purchases, this monetization model allows you to generate income each time a conversion is generated through your app’s referral links. To incorporate this model, you need to partner with other finance services providers, such as insurance companies, personal loan providers, and others to promote their products and services within an app.
- Commissions. While most investing apps implement commission-free trading on stocks, ETFs, and options, some may charge a commission fee when you buy or sell stocks.
Riding the fintech wave: personal finance app market trends
The personal finance software market is up for grabs. However, to hit it big, money management applications should align with the current market trends and customer preferences. Here’s what is trending in the market of personal finance software:
- Automation and AI in financial planning. Finance management applications are now expected to anticipate and automate budgeting decisions or tasks and recommend actions based on the user’s spending habits, thus putting users on the path to efficient budgeting.
- Chatbot and virtual assistance dominance. From creating budgets to tracking expenses, robo-advisors, chatbots, and gen AI assistants have made their way into the leading personal finance management apps such as Plum and Cleo, increasing the accessibility of professional finance advice and teaching financial literacy to help individuals make informed decisions about their finances.
- Micro-investing. Micro-investing platforms are expected to skyrocket beyond $36 billion, democratizing investing and making it more accessible to a wider audience, including millennials and those with limited financial resources.
- Cryptocurrency support. Finance management apps that want to differentiate in the market follow the lead of apps like Lunch Money and Kubera and offer direct crypto investing and real-time tracking of crypto tokens.
- Gamification. Badges, progress bars, and other incentives help users reach their goals faster while also allowing for collecting valuable customer behavior and preferences data.
- Environmental awareness. With carbon footprint calculators built-in, finance and banking apps help users trace transactions and assign them carbon footprints.
Start your personal finance app development journey with Orangesoft
Making a finance management app from scratch, irrespective of its type and target audience, can be a bumpy road. Stringent security requirements, stiff competition in the personal finance app market, app design challenges, and other hurdles can throw quite a few curveballs into your development process. So, when you set out on this path, it’s always nice to have a trusted tech partner who has hands-on experience in solving these challenges.
At Orangesoft, we guide fintech startups on their product development journey, providing them with the skills, knowledge, and battle-tested expertise needed to get the app up and running. With over 13 years of experience and over 300 projects in our portfolio, our web and mobile app development company knows how to build and grow a competitive and successful fintech application.
